From clutter management to fleet management

We still see it often: fleet managers busy with all kinds of operational tasks. Boots in the mud, they call it. Managing fuel cards, forwarding dealer quotations to the leasing company and requesting green cards. It keeps you very busy, and that is before we mention payroll deductions, taking in cars and redeploying pool cars. Is all that wrong? No, of course not. Someone has to do it. The question is whether the fleet manager should be the one doing it.

The name says it all: fleet manager. He or she should primarily ensure the process runs well. With 10 cars that is no problem; fleet management is a side duty, often placed with administration or HR. With 1,000 cars it genuinely has to be organised well, or things inevitably go wrong. Between those two extremes sit a great many fleets, and the quality of fleet management differs strongly from company to company.

Those differences are partly caused by the variety of departments where fleet management ends up. Some place it with HR, others with finance. Increasingly it surfaces at facilities, and occasionally it sticks with procurement, which apparently could not let go after a tender. Either way: fleet management touches all these departments. It is a discipline with many facets (technology, taxation, employment conditions, finance, procurement, logistics) and looks like a simple trade, but is secretly complex.

Many fleet managers struggle to rise above that complexity and stay glued to operations. You recognise them by the registration certificates in the desk drawer, a key cabinet on the wall and a stack of fresh fuel cards within reach. Messy, but safe: without them the process stalls almost immediately. The daily stress is often compensated by events hosted by dealers, importers and leasing companies. Understandable, but not wise.

Money quietly drains away, like sand through your fingers.

What should a fleet manager do, and stop doing, to create calm? It starts with building a structure that makes as much as possible visible, so you can intervene the moment a deviation appears. Building and maintaining that structure takes time and energy, which first has to be freed up. The best way: write down all daily activities and ruthlessly outsource everything you know someone else can do better, or where you add no value yourself.

What is the point of receiving green cards in your pigeonhole and forwarding them to drivers yourself? Why would you get involved in dealer quotations? No idea, get rid of it. Strip your own role and place it with the leasing company: it is built for the efficient processing of operational tasks. A good leasing company can run the entire ordering process so that you only need to sign, and will happily communicate directly with drivers about fuel cards, fines, green cards, return instructions and payroll deductions. You just have to ask them to do it. So do.

Once freed from daily clutter, you can set up the new fleet management. In essence: collect as many key figures as possible, of the highest possible quality, with as little effort as possible. With those you build a reporting structure in three layers.

First layer: financials

This report preferably provides monthly insight into the key financial figures: average lease costs per car, average fuel costs, rental costs. Do not forget adjacent mobility costs such as mileage and travel allowances, and include general fleet figures: number of cars, expected vehicle changes and any idle-time figures for the car pool. Have all tables show the rolling average over at least four months; cost deviations then stand out immediately. For the visually inclined, presenting the data in charts does no harm.

Second layer: KPIs

The KPI report provides insight two to four times a year into the figures behind the financials. Suppose fuel costs are rising. That can have several causes: more kilometres driven, higher consumption, more petrol cars relative to diesels, fuel card misuse or higher fuel prices. A few KPIs quickly show where the deviation comes from. Include supplier performance figures and, for fleets of some size, average driver satisfaction. Again: a single measurement says little, but a rolling average mercilessly exposes where things go wrong. The KPI report is also ideally suited to flag deviating driving behaviour: include enough KPIs on damage, fuel consumption and mileage deviations.

Third layer: environment

You can be quite busy with your own responsibilities, but it does no harm to look over the fence at least once a year. How do our costs compare to others? Are our procurement conditions still market-conform, or have developments created new opportunities? Deviations here are not easy to uncover, but it is usually worth the effort, and it prevents the embarrassment of discovering you have received less discount than your nearest peer for four years running. An independent party working for multiple fleet owners can help obtain market-conform comparison figures.

Collecting data and calculating KPIs must not become a goal in itself; what matters is acting on the figures. Damage frequency rising? Investigate the cause and approach the repeat offenders, send them on driving-style training if needed. Lease rates rising? Talk to the leasing company and try to turn the tide, and consult HR about the consequences for employees' car choices. More and more kilometres being claimed? Calculate whether it makes sense to deploy small, economical lease cars for high-mileage drivers using their own car.

Collecting the data is a trade in itself, and condensing it into a coherent report can take a lot of time, certainly with multiple leasing companies or self-managed vehicles. A limited number of software solutions exist specifically for fleet owners. Most packages can translate data from different sources into unambiguous information, but functionality and costs vary widely. Think carefully in advance about what exactly you want to do with it.

The transformation from operational to tactical fleet management is not easy. It requires insight and the courage to let go of familiar tasks. But once in place, it brings real calm: virtually the entire process is fitted with virtual smoke detectors. Something may start to smoulder now and then, but you are there in time to put it out.

Molthoff Fleetmanagement supports this shift in two ways. With Fleet Monitor we take over tactical management entirely: checks, contract management and quarterly reports with a management summary. And if you mainly want to know whether your conditions are still market-conform, our independent Benchmarking compares your rates and terms with the market.